Thursday, February 03, 2011

Michael Tanner, writing in NR, highlights a new conservative hero ... and that would be ... Andrew Cuomo? Seriously?

With the possible exceptions of California and Illinois, no state is facing as big an economic mess as New York. Years of profligate spending and crushing taxes have left the state with a $10 billion budget shortfall. The conventional wisdom said that despite having the nation’s highest tax burden, and what Cuomo has called the “worst business climate in the country,” New York would have no choice but to hike taxes yet again. That is, after all, the path that Illinois just chose, raising its state income tax by 75 percent.

Cuomo rejected that approach, early, often, and loudly. He vowed to balance the state’s budget without borrowing and without raising taxes.

Cuomo, to the enragement of liberals, has capped property taxes and allowed a surcharge on the rich to expire. The reason is that these taxes have created a terrible business environment in New York. But, as I’ve noted, cutting taxes is easy. It’s cutting spending that’s hard. Lo and behold, Cuomo is delivering:

Almost immediately, he imposed a freeze on salaries for state workers. While that move was more symbolism than substance, it was important symbolism. Public-employee unions have been some of the state’s most powerful special interests. Since 2007, while most Americans have been struggling, New York public employees have seen their wages and benefits go up by 13 percent. Beyond the symbolism, Cuomo’s freeze will save taxpayers $200 million this year. Cuomo is also set to cut the size of the state bureaucracy. His 2011 budget, released yesterday, calls for a reduction in the state work force of some 15,000 people, slightly more than 7 percent of the state’s 200,000 employees. And he cut his own office’s budget by 25 percent.

Overall, Cuomo’s budget represents the first proposed year-to-year drop in state spending since the mid 1990s. Everything is on the table, from prison construction to state aid to New York City.

Cuomo also appears ready to go after the sacred cows of state spending: education and health care. He has pledged to eliminate state budget rules that lock in annual increases to educational programs and Medicaid — a 13 percent hike this year. But beyond doing away with the automatic $8 billion hike built into the budget formulas, Cuomo plans real cuts as well. His budget would cut Medicaid spending by $3 billion.

He would also shave nearly $1 billion from state education spending. And Cuomo has made it clear that he was talking about actual cuts, not just the traditional game of decreases in the rate of increase.

I don’t know if this will get through the New York legislature. But I’m finding myself doing something I though I’d never do—applauding a Cuomo. Given that I’m also pleased with what Jerry Brown’s early moves in California’s budget crisis, I feel like I need to lie down for a while. Up is down, black is white, Democrats are cutting spending. WTF?

The “WTF” is that we are running out of money. It’s gotten so bad that even one of the most liberal governors in California history and the scion of one of the liberal governors in New York history can read the writing on the wall. Government taxes too much and spends waaay too much. This is not sustainable.

Obama had a chance to go the way of Brown and Cuomo with last week’s SOTU show. He had a chance to say that entitlements were on the table, to say that no program was immune from cutting, that he’d pay the political price to balance the budget. Instead, he punted.